Schumpeter, Hegel and the vision of development

Historical Change and the Competitive Advantage of Firms

“…Innovation by foresighted entrepreneurs did challenge the existing industrial order of products, markets and business models in a way that created disequilibria. But an important part of the process of economic change was conducted by the work of arbitraging entrepreneurs (so-called imitators) who profited by moving disrupted markets toward a new equilibrium (Schumpeter 1935, Freeman 2002, Prendergast 2006) -toward a new institutional order. It was the cycle of major disruptive innovation destroying the current order followed by the reestablishment of a new industrial order by arbitraging entrepreneurs that characterized the process of change inherent to capitalism.…”

“…Schumpeter's own notion of the dialectical process of "creative destruction" was not entirely original, but derived from longstanding historical theories of dialectical change can be traced to Hegel and Marx (Prendergast 2006). The notion that markets, industries, and capitalism itself were not stable and equilibrating but rather were inherently subject to radical changes that distinguished one period of competition and rivalry from the next was one of the central historical critiques of classical and neoclassical political economy since the middle of the 19 th century.…”

Historical Change and the Competitive Advantage of Firms: Explicating The 'Dynamics' in the Dynamic Capabilities Framework

“…The implicitly dialectical model of contextual change embedded in the dynamic capabilities framework owes its origins to the influence of Schumpeterian thought within the contemporary construct of dynamic capabilities. As Prendergast (2006) points out, Schumpeter's reasoning about the relationship between innovative firms and their contexts, captured in the notion of "creative destruction," was based on a dialectical process of the relationship between innovative action on the one hand and institutionalizing response on the other. Economic change over time, Schumpeter (1936 [first published in German 1911]) posited, was not caused by innovation alone.…”

“…Innovation by foresighted entrepreneurs did challenge the existing industrial order of products, markets and business models in a way that created disequilibria. But an important part of the process of economic change was conducted by the work of arbitraging entrepreneurs (so-called imitators) who profited by moving disrupted markets toward a new equilibrium (Schumpeter 1935, Freeman 2002, Prendergast 2006) -toward a new institutional order. It was the cycle of major disruptive innovation destroying the current order followed by the reestablishment of a new industrial order by arbitraging entrepreneurs that characterized the process of change inherent to capitalism.…”

Marx on entrepreneurship: A note

“…In Capitalism, Socialism and Democracy (1947, pp. 16 and 32), however, Schumpeter was critical of Marx for his failure to acknowledge the contribution of individuals of superior energy and intelligence (leaders) and castigated him for having no adequate theory of enterprise (Prendergast, 2005).…”